If there's one thing the new chairman of the Real Estate Board of New York wants everyone to know, it's that its members are New Yorkers first.

"If New York works generally, then our real estate will be valuable," said Bernard H. "Bernie" Mendik of his new post.

The chairman of the Mendik Company, the owner of more than 12 million square feet of investment property, located mostly in Manhattan, will lead the 5,000-member board for the next three years.

REW recently chatted with Mendik and REBNY President Steven Spinola about how the board is broadening its scope by becoming more of an advocate for business and the city in general and by working to effect change in national issues.

"Our objectives are for the city as a whole and our industry as beneficiary," Mendik said.

The board in recent years, according to Mendik and Spinola, has become more of an activist with the three levels of government mainly as a result of the increasing problems facing the real estate industry and the city. In June of 1990, motivated by the recession, the board made a comprehensive series of proposals to the mayor, top city officials and some state executives. Among the recommendations were: Reforming tax policy, enhancing services and business costs, attracting new investment, and incentives for job retention and creation.

The board, Spinola said, has stepped up its efforts to work with all the other civic and business organizations in a concerted effort to upgrade the city. They support the BIDs and there is "cross" board membership. They are working as well with the Citizens Budget Commission and the New York City Partnership among others. They have even worked with City Planning and local community planning groups on devising zoning plans of consensus. Mendik said they share a common concern with these groups in wanting a better quality of life in New York. He wants to see a concerted effort on the part of all groups to create a "safe and clean central business district" by, among other things, cleaning up the routes into the city from the airports and reducing sidewalk peddling.

Success with Taxes

Last year, REBNY spearheaded, together with the Rent Stabilization Association, the Taxpayers for an Affordable New York campaign. The "grass roots" effort was a collaboration of civic, business, trade, labor, community and neighborhood groups to knock down the mayor's proposed $800 million tax increase. The coalition raised $1 million and managed to get the mayor's tax hike lowered by 50 percent. The coalition also campaigned for a tax freeze, which came just a few weeks ago.

"That was beyond what we thought that would accomplish," Spinola said.

Spinola believes they paid respect to the City Council by taking into consideration what they wanted also.

Willing to Pay More

Mendik and Spinola agree that the REBNY members are not against paying their fair share of the city's tax roll and they will pay more for improving the city.

When Mayor Dinkins took office, Mendik said, they told him the most pressing problem facing the city was crime. They wanted, as a start, more foot-patrol officers and they were amenable to forking over the extra funding -- an additional $155 million increase citywide.

"We were willing to put up or shut up," Mendik said.

Spinola chimed: "It's not that we say |no' to every tax."

Property owners, they stress, have been at the forefront of the Business Improvement District movement in New York. Through additional assessments solely to commercial property owners -- not tenants -- the city's BID's infuse $18 million back into the city for extra services including additional security and sanitation.

"We voluntarily pay that tax," Mendik said.

Initiatives for Business

With the old Industrial and Commercial Incentive Program (ICIP) on a six-month extension through June 30, REBNY has urged changes that will expand the old program. They urge incentives for renovation, regardless of location, for capital improvements regardless of location; a lengthening of the benefit period; change of use incentives for obsolete buildings; permitting benefits to mixed use buildings and other changes.

The board, Spinola said, also supports incentives that will retain and attract tenants to the city. "That's the immediate need," Mendik said. They want direct benefits to tenants for lease signings and job creation and they want to fade out the occupancy tax. New York City, they said, is the only city that has such a tax.

State Efforts

The board is busy campaigning for the city and the industry on the state level because, among other reasons, the city's budget is controlled by the state. They make sure New York gets the fair share of state money, Spinola said, and they support the mayor's revolutionary plan to re-allocate Medicaid to the state. They have asked the mayor to confer with them when he is going to Albany so that they may have some input and help his agenda along.

Last year, the board was instrumental in making new state laws for brokers more reasonable, such as the law that would force brokers to fill out a written disclosure each time a prospective tenant walked into the office. The law now excludes commercial facilities and residential buildings of anything larger than four units.

"The market is really different here," Spinola said.

The National Front

"It's the national issues that are affecting the quality of life in New York -- affecting real estate, affecting business, Mendik said.

Board representatives have been traveling to Washington to lobby Congress and they have spoken to top staff members of President Bush.

This recession, Mendik said, has hit the real estate industry harder than any other because today we don't have the availability of financing that we had in other bad times and, due to recent tax changes, we don't have the investors.

"We [real estate] were singled out in the 1986 tax act very severely," Mendik said. "... It drove investors right out of the [real estate] community."

Spinola said the board was encouraged by the President Bush's recent state of the union address and the initiatives he wants that will rekindle real estate investment in this country such as: modification of the passive loss rules, a reduction of the capital gains tax to no more than 15.4 percent, incentives for first-time homebuyers, and his appeal to the banks to relax their regulations and help us out of this "credit crunch."

"We clearly saw some of our requests expressed and now we have to see them implemented," Spinola said.

They were also pleased to hear the president call for an end to the "credit crunch."

One of the greatest problems, facing owners today, Mendik said, is the inability for owners to refinance. For many owners, retaining tenants is dependent on building improvements. He said he would like to see a relaxation of the rules forcing banks to appraise based on current rents, rather than projected rents after building renovations or an improved market.

He suggests banks might be more willing to lend if some of the burden for problem loans was taken off them by possibly allowing losses to be credited against their taxes

To inject more liquidity into the economy, Mendik endorses tax credits for individuals who make savings deposits up to $25,000 for a period of seven years or so.

Expanding Membership

REBNY is also widening its reach within the real estate community. While initially an organization for commercial brokers and developers, REBNY has opened the fold to include: housing developers, apartment building owners, and residential brokers.

"We have put out our hand to them and we support their proposals," Mendik said. In that list, Mendik included: vacancy decontrol, a means test, zoning and land use.

The board is also starting a hotel division and they are planning to draw in members from such suburban locals as Nassau County, Westchester, and Long Island.

"Our issues are not necessarily localized to New York City," Mendik said. "By reaching out to them, we add strength to the board."

Among REBNY's most recent concerns is Mayor Dinkins' new budget, which Spinola and Mendik believe will lower the quality of life in New York. They called the mayor's plans self defeating because it will reduce essential services such as: sanitation, police and schools.

The mayor's so-called "four-year tax freeze", another element of the plan, Spinola reminds, is only a freeze on the rate. The mayor has not done anything to reduce assessed valuations. This year's tentative tax role reflected a .47 percent drop in assessed valuations -- $83.61 billion to $83.22 billion.

"It should have been a double-digit drop," Spinola said.

The board meets with key city and state executives connected with the issues on the board of governors level and executive committee level. They have also held forums for members so that they may press elected officials and candidates on specific issues.

According to Mendik, REBNY has slowly transformed from a group of sole entrepreneurs -- "lone wolves" -- to an organization that is aggressively confronting its problems and shaping city policy. "It became evident that we had to be a much more cohesive group and speak as one voice," he said.

Spinola said he was encouraged by the healthy turnout -- 18,000 members -- at REBNY's annual banquet last month.

"I think in these difficult times, people are beginning to realize it's more important to be involved than in the good times," said Spinola.

Mendik and Spinola both said credit for the board's strength today must go to its former chairman. In recent years, the board has been headed by such noted industry members as: Burton Resnick, Jerry I. Speyer, Larry Silverstein, Seymour Durst, Bertram French, Richard Seeler, and Robert V. Tishman.

'Our efforts are for the city as a whole and our industry as beneficiary.'

The board is expanding its membership to include hotels and suburban professionals.

PHOTO : Bernard Mendik, Chairman, Real Estate Board of New York

PHOTO : Steven Spinola, President, Real Estate Board of New York

COPYRIGHT 1992 Hagedorn Publication
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